article/Representative Office

Incorporation

Representative Office

For foreign companies wishing to explore market opportunities or manage its company affairs without conducting any commercial activities in Singapore, a representative office is an option to consider. Essentially, a representative office in Singapore is registered as a temporary arrangement for conducting marketing research activities or feasibility studies on behalf of its parent company.

Packages & Fees

Characteristics

A representative office does not have any legal status and thus, cannot be engaged in any commercial or revenue yielding activities, or enter into any contracts or transactions. Like a branch office, a representative office is not a separately incorporated entity; its liabilities extend to its parent company. As a representative office does not have any legal status nor is it allowed to be engaged in any commercial activities, it does not need to file nor maintain any statutory document or submit tax returns in Singapore.

To register a representative office, the foreign company must contact International Enterprise Singapore, which is the registration authority for representative offices for all sectors except banking, finance and insurance. Foreign companies in these sectors must register with the Monetary Authority of Singapore.

Since a representative office is meant to be temporary, it must be converted into a subsidiary company or branch office if the parent company wishes to continue its operation in Singapore after three years.

A representative office is suitable for foreign companies that wish to set up an administrative office to explore business opportunities in Singapore or coordinate activities on behalf of its parent company.

Compliance Requirements

The representative office must confine its activities only to market-related research, building trade contacts, handling product inquiries, coordinating, and participating in trade shows and exhibitions.
It must not be engaged in any trading activities, including signing any business contracts, issuing invoices and receipts, opening or receiving letters of credit, or providing any service for a fee.
The representative office can have no more than five employees, and the representative head it must be an officer from the head office of the foreign company.
The foreign head office must have an annual sales turnover of more than USD250,000.
The foreign head office must have been established for at least three years.
The Singapore branch office must bear the same name as the head office, clearly stating that it is a representative office, and the name is subject to the approval of the Registrar of Company.

Pros and Cons of a Private Limited Company

It is a fairly easy and inexpensive way to stake a presence in Singapore.
There is no registered capital required.
It is easy to manage since there is no need to maintain any statutory document or file any tax return to the authorities in Singapore.

It can only engage in a very limited range of activities, and it cannot perform any revenue-generating transactions.
A representative office needs to be converted into a branch office or subsidiary company if the parent company decides to continue its operations in Singapore in the long term.

Note

VOPlus can advise you on the most suitable type of business entity for your business and help you convert a private limited company in Singapore promptly. Contact us today for a consultation!